The Zacks Analyst Blog Highlights: Verizon Communications, Apple, Big Lots, Hormel Foods and Guess? Inc.

CHICAGO, Aug. 26, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Verizon Communications (NYSE: VZ), Apple (Nasdaq: AAPL) Big Lots (NYSE: BIG) Hormel Foods (NYSE: HRL) and Guess? Inc. (NYSE: GES).

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Here are highlights from Thursday's Analyst Blog:

On Jobs, Jobless Claims & Jackson Hole

A major contributor to this week's market gains has been the expectation that Ben Bernanke will come out with something helpful in his Jackson Hole speech on Friday. And in that line of thinking, a weak labor market report increases the odds of something positive from the Fed Chief. I am very skeptical of this view. In fact, given these expectations, the market will likely get a negative surprise from Bernanke's Friday speech.

Weekly Jobless Claims increased by a greater than expected 5 thousand for the week to 417 thousand. The prior-week's tally was revised upwards to 412 thousand from 408 thousand. The relatively more stable 4-week average increased by 4 thousand last week to 407.5 thousand.

One unsual item in this week's claims number is the impact from Verizon Communications (NYSE: VZ) workers strike. Adjusting for that impact, the claims number would roughly be in-line with expectations. But irrespective of the Verizon impact, the claims number has remained above the 400 thousand level over the last four months except for the one-week drop below that level two weeks ago.

The elevated claims level is no doubt a matter of concern. But on the positive side, we have not seen any material deterioration in this series either. Some modest slippage in the last couple of weeks notwithstanding, the overall trend on the claims front has been positive.

Let's not forget that weekly claims were as high as 478 thousand in April. They key test now will be the August non-farm payroll report coming out next week. If we get numbers that are along the lines of July, then it will be good enough proof of recession-defying momentum in the economy.

The most important corporate news is the leadership change at Apple (Nasdaq: AAPL), where the ailing CEO Steve Jobs is being replaced by COO Tim Cook. It will be interesting to see how Apple shares behave today and in the coming days as the 'Steve Jobs Premium' unwinds.

On the earnings front, we got an EPS beat from Big Lots (NYSE: BIG) on modestly better-than-expected revenue. But the close-out retailer had weaker than expected same-store sales comps in the quarter. Hormel Foods (NYSE: HRL), the maker of Jennie-O Turkey products and other brands such as Spam, came short of earnings expectations as high input costs weighed on margins.

Guess? Beats on Overseas Profits

Guess? Inc.'s (NYSE: GES) second quarter 2012 adjusted EPS surpassed the Zacks estimate by 3 pennies and stood at 84 cents. It also exceeded the year-ago estimate of 72 cents by 16.7%. Reported EPS came down year over year by 9.72% to 65 cents from 72 cents in the previous year.

Management credited the booming international business with consistent ly good performance in Europe and Asia for strong results in the quarter.

The Way Forward

Guess? inspires confidence owing to the continuing strong business momentum in the challenging environment of weak consumer and category growth as well as significant input cost inflation. Management also feels that with strong cash position and solid capital structure, the company would easily carry out its long-term strategies and meet its vision, focusing on measured growth.

Based on the results posted in the quarter, the company estimates the third quarter diluted earnings to be in the range of 71 cents to 74 cents. For the fiscal 2012 the company sets an outlook of earnings in the range of $3.25 to $3.35 and GAAP diluted earnings per share between $3.06 and $3.16.

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